The amount of information available to an organization increased drastically over the years. The traditional method of utilizing one’s gut feeling, intuition, and observational data for making business decisions no longer cuts it. Fortunately, advancements in technology paved the way for businesses to employ Business Intelligence (BI) systems which collect data together from a multitude of sources. It is such a crucial business aspect that a study by Bi-Survey.com shows that faster, more accurate reporting that aids in business decisions as the top benefit of business intelligence to companies.
In this article, we’ll discuss more on the benefits of business intelligence platforms including the definition of BI and its uses to boost your business processes. We also compiled the leading examples of business intelligence software you can check out to streamline your search.
BI is a complex and broad subject to tackle which involves various technologies, processes, architectures, and methodologies. But in essence, business intelligence is an umbrella term that refers to the tools, applications, and best practices to access and analyze information that’s used in improving and optimizing business performance and decisions. It translates raw data into relevant and meaningful information that enables operational, tactical and strategic insights for a more effective decision making.
Business intelligence software explained, in short, is a technology-driven process that collects and analyzes data to extract actionable insights from it. This gets the right information to the right people at the right time. Making decisions for you, your team, and your company is more reliable because you’re informed and supported by figures and analyses.
While BI tools have been around for a while and considered as mature in the industry, it was only accessible for large enterprises with the infrastructure, finances, and resources to invest in and implement the technology. However, tech advances and cloud computing has made BI available and affordable for small businesses nowadays. What makes it a good option for SMEs is that when they expand, it provides them with a wide multitude of tools to manage their growing operations. But Excel spreadsheets alone are no longer sufficient as managing a business requires more than just an overview of the details; seeing how they’re all connected is even more crucial.
The cloud is a simplified data warehouse for centralizing data in order to have a single source of truth. Its improved user interface boosts data visualization. This makes information easily digestible to the users. It also drives more power to the user with search-driven analytics and self-service features.
For a better understanding of the software, getting to know the elements that make up the system is helpful. A BI software has specific, complex layers that come in a wide range of categories depending on the vendor, product, users, and specialty but for this article, we’ll narrow it down to its three basic components:
Over the years, companies are realizing the value of maximizing limited resources using a BI solution to efficiently spot areas for cost savings and discerning new business opportunities. Here are some benefits of business intelligence software and aspects where it can help your business:
Growing revenue is one of the most crucial goals of enterprises to measure their company’s performance and profitability. Hence, it’s a critical purpose of business intelligence software. It addresses this by providing actionable intelligence to drive business transformation. Removing barriers between multiple data sources also provides accurate forecasts. For instance, a company integrates BI tools for their business analysts to gain access to millions of data directly from the application without requiring a time-consuming data movement.
Streamlining the process generates significant insights and reports that reflect not only what has happened and what is happening but also forecast what will potentially happen in your business operations. Getting your hands on this information helps you prepare and formulate effective strategies for growing your revenue and preventing probable losses. Furthermore, the software finds sources with higher chances of ROI by analyzing marketing campaigns and strategies.
It’s perilous for a company not to get their financial budget sorted out. Having a BI software optimizes cost control and reduction to improve operational efficiencies. It identifies areas in your organization where you can cut down costs. One example is doing and keeping an inventory which tends to escalate expenses.
The application uses raw data to answer questions such as what areas in your organization gets the highest expenses and how to recognize them. Marketing is one of the corporate functions that can utilize this approach. The BI tools determine which list sources yield high results from the analysis of direct mail and various marketing campaigns. It automates sales processes, sourcing and purchasing, inventory understanding, and HR analytics.
Risks typically stem from human intervention using Excel spreadsheets. For instance, reporting on spreadsheets is done by hand so there may be instances where data is pasted into the wrong cell or a formula is incorrectly formulated. Cutting, copy-pasting, and building formulas are only some of the errors that can occur even to skilled users. Since there is no audit trail facility, identifying and locating errors made is close to impossible. This can give a big blow to aspects such as budget and salary calculations. The absence of document or process controls also creates issues in determining who made the spreadsheet, who updated it, and when, why, and how it was done. There’s also the time-consuming process of keeping a spreadsheet that costs your organization man-hours expenses.
Business Intelligence provides reporting solutions with a capability of connecting to a wide array of data sources. Having figures, insights, and facts helps you make informed business decisions to decrease potential risks.
Statistical analytics tend to be more complicated to understand and operate. It poses a challenge against democratizing data and analytics and enabling data-driven insights from circulating throughout your organization. It’s safe to say that data visualization has become a de facto standard for modern BI systems because of the significant role it plays in big data and advanced analytics projects. Visualization tools provide a quick and easy overview of an otherwise massive trove of data.
BI software programs allow easier recognition and exposition of data that can easily go unnoticed with a text-based report. Today’s applications maximize correlations, patterns, and trends with the use of sophisticated methods such as bar, pie, and fever charts, heat maps, sparklines, and infographics, among others.
Before, getting answers to data-driven questions took some time because only specialists can access and interpret the information. The response can take days to reach the appropriate member. But using the data warehouses of BIs with the involvement of a human analyst, search operations and transactional interactions are now accomplished at lightning speeds.
The system also offers real-time decision making so you can make prompt resolutions, especially to business-critical operations. For instance, if a competitor drops their product prices, you must be prepared for actions and strategies to counteract that will not impact your profitability at a certain timeframe, like say, 12 months. And you must decide on it immediately. Rapid commitments must only be done with informed decisions provided by your BI software.
Monitoring and measuring the performance of a business are crucial for understanding, managing, and improving an organization’s operations. This feedback guides the right people on certain actions to implement and aligns activities with established plans to drive success in a business. Depending on one’s goals and objectives, the metrics used may vary as per the company. One of the key priorities for SMBs are developing key performance indicators (KPIs) to track, measure, and grow their business.
Aside from financial statements and sales results, BI solutions cover some of the highly-used metrics like employee performance/productivity, employee satisfaction, BI integration system usage, and decision-making or task-completion timeframes, among others.
A vast majority of businesses still rely on Excel spreadsheets for their data analysis, budgeting, and reporting according to a survey as per SearchEnterpriseDesktop. These are then accumulated in Word or PDF documents. These files are then copied multiple times by different users and then edited, modified, and emailed for circulation among team members. Its end result consists of documents where multiple copies exist from the same, original document with only a single final version. This can be cumbersome and exposed to errors due to data movement.
BI tools come useful by providing an effective collaboration and communication between members to keep the data up-to-date with a single source of truth. It bolsters consistency and tracking of changes. Notifications also alert everyone when adjustments or new updates are made to a file.
Also known as predictive analysis, this area of data science utilizes data mining, integrates machine learning, and harnesses a variety of statistical techniques for modeling in order to make educated predictions about the future. The predictive models exploit certain patterns found in historical and transactional data for identifying business opportunities and risks.
This is a fundamental purpose of business intelligence software as it’s used in detecting frauds, especially in cybersecurity. It also improves operations to manage resources and forecast inventories. Customer purchases and responses are determined by the software to optimize marketing campaigns. This assists businesses in attracting new customers and retaining old ones while growing profitable markets. And most importantly, it reduces potential business risks to protect your organization’s integrity.
Here’s a succinct additional information on some of the features that work together in order to deliver the benefits of business intelligence software. They are divided into three broad categories:
The traditional BI tools used by business people to perform specific recurring data analyses.
An approach that enables users to access and manage corporate data even without a background in statistical analytics, BI or data mining. It allows users to add data and define new metrics without IT intervention when conducting an analysis.
A data analysis that encompasses simple mathematical calculations of sums and averages. It utilizes algorithms and statistical and mathematical formulas to generate new information and recognize patterns that forecast outcomes and their probabilities.
Here are some examples of business intelligence software:
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